RAM is used to store data when the computer is on.
Adding more RAM can help your PC run a little more smoothly if you do not have much RAM to begin with. A 32-bit operating system like Windows XP or the 32-bit versions of Windows Vista and Windows 7 can only recognize at most about 3.25GB of RAM regardless of how much RAM you have installed.
A 64-bit operating system like Windows Vista and Windows 7 can recognize up to 24GB of RAM to the best of my knowledge. However, most people will not benefit from more than 6GB of RAM.